MADRID (Reuters) - A Spanish court opened a fraud case on Wednesday against former executives of state-rescued lender Bankia , including one-time IMF chief Rodrigo Rato, as public rage engulfs a bank which is in line for the biggest share of an EU bailout.
The lawsuit was brought by one of Spain's smaller political parties and accuses 33 officials including Rato - a former government minister who stood down as Bankia chairman in May - of fraud, price-fixing and falsifying accounts.
Under Spanish law, the crimes carry jail sentences ranging from six months to six years but commentators said that while corporate corruption cases grab the headlines in Spain, they rarely resulted in convictions.
"It will be a long-running, complicated case," said Pedro Schwartz, economics professor at San Pablo University in Madrid.
Spaniards are angry with the political and business elites in general as the government of Prime Minister Mariano Rajoy has imposed austerity policies and had to seek European Union aid to save a series of banks including Bankia from collapse.
Fury is particularly directed at Bankia as hundreds of thousands of small savers were persuaded to buy shares in the lender when it was floated on the stock market in 2011, only to see their investments all but wiped out in less than a year.
Protesters have staged street demonstrations in their thousands, banging pots and pans and blowing whistles outside Bankia branches.
"There are many citizens who feel they were hoodwinked," said Joaquim Bosch, spokesman for judges group 'Judges for Democracy'. "It's too early to say whether there were crimes committed or criminal responsibilities, but it calls for a thorough investigation."
The case, brought by minority political party UPyD led by charismatic Basque politician Rosa Diez, is one of many complaints brought against Bankia, which requested 19 billion euros ($24 billion) in state aid in May.
Two sources who know the judge assigned to the Bankia case, Fernando Andreu, say he is likely to handle the probe aggressively. Andreu is friendly with human rights investigator Baltasar Garzon, best known for ordering the arrest of former Chilean military leader Augusto Pinochet in 1998.
The judge will probably group together other cases with this one, a source with knowledge of the matter said.
In the case brought by the UPyD party, the High Court is demanding that Rato and other executives appear in person. None of the Bankia staff have been charged.
The court also wants former Bank of Spain governor Miguel Angel Fernandez Ordonez to appear as a witness, alongside the partner in auditor Deloitte who was in charge of signing off on Bankia's results, and the chairman of the Spanish stock market regulator.
"It's a good sign," said a spokesman for a group of shareholders looking to launch a similar case. "We still have to be a little cautious because there aren't any formal charges yet."
SELLING TICKETS FOR THE TITANTIC
The syndicate of banks selling shares in Bankia's initial public offering was led by Bank of America/Merrill Lynch , Deutsche Bank , JPMorgan and UBS . Other banks had smaller roles in the deal.
One source at a bank involved in the IPO said it had to hand over files on the deal. A banker at one of the global coordinators of the IPO said the banks behind the listing believed they were safe from legal challenges because risks had been explained to investors in a prospectus.
"It's like attacking the people who sold the tickets for the Titanic," he said, asking not to be identified.
The government took over Bankia in May after it became clear the bank could not cope with losses on indiscriminate lending during a property boom that collapsed four years ago.
Rato, who was in a former government of the ruling center-right People's Party which is now led by Rajoy, was IMF managing director in 2004-2007.
A spokesman for the Spanish government said: "Regarding Bankia all we can say is that one must respect an assumption of innocence and judicial independence."
Bankia holds more than 10 percent of Spanish deposits and is the biggest bank likely to receive a capital injection when European bailout funds materialiselater this year.
It is unclear in what form the lender will continue trading once it receives bailout funds, but there is no doubt its image has been severely damaged by the rescue.